Your Right to Know

WASHINGTON — Going it alone — without Congress making a law — just doesn’t go as far as
President Barack Obama made it sound at times last night in his State of the Union speech.

A look at some of the facts and political circumstances behind his claims, along with a glance
at the Republican response:

Obama: “Today, after four years of economic growth, corporate profits and stock
prices have rarely been higher, and those at the top have never done better. But average wages have
barely budged. Inequality has deepened. Upward mobility has stalled.”

The facts: A team of economists led by Harvard’s Raj Chetty released a study last
week that found the United States isn’t any less socially mobile than it was in the 1970s. Looking
at children born between 1971 and 1993, the economists found that the odds of a child born in the
poorest 20 percent of families making it into the top 20 percent haven’t changed.

Still, in a study of 22 countries, economist Miles Corak of the University of Ottawa found that
the United States ranked 15th in social mobility. Only Italy and Britain among wealthy countries
ranked lower. By some measures, children in the United States are as likely to inherit their
parents’ economic status as their height.

Obama: “We’ll need Congress to protect more than 3 million jobs by finishing
transportation and waterways bills this summer. But I will act on my own to slash bureaucracy and
streamline the permitting process for key projects, so we can get more construction workers on the
job as fast as possible.”

The facts: Cutting rules and regulations doesn’t address what’s holding up most
transportation projects, which is lack of money. The federal Highway Trust Fund will run out of
money in August without action. To finance infrastructure projects, Obama wants Congress to raise
taxes on businesses that keep profits or jobs overseas, but that idea has been a political
nonstarter.

The number of projects affected by the administration’s efforts to cut red tape is relatively
small, said Joshua Schank, president and CEO of the Eno Center for Transportation, a research
group. “The reason most of these projects are delayed is they don’t have enough money. So it’s
great that you are expediting the review process, but the review process isn’t the problem. The
problem is we don’t have enough money to invest in our infrastructure in the first place.”

Obama: “In the coming weeks, I will issue an executive order requiring federal
contractors to pay their federally funded employees a fair wage of at least $10.10 an hour, because
if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.”

The facts: This would be a hefty boost in the federal minimum wage, now $7.25, but
not many would see it.

Most employees of federal contractors already earn more than $10.10. About 10 percent of those
workers, roughly 200,000, might be covered by the higher minimum wage. But there are several
wrinkles. The increase would not take effect until 2015 at the earliest, and it doesn’t apply to
existing federal contracts, only new ones.

Obama also said he’ll press Congress to raise the federal minimum wage overall. He tried that
last year, seeking a $9 minimum, but Congress didn’t act.

Rep. Cathy McMorris Rodgers of Washington, in her prepared Republican response: “
Last month, more Americans stopped looking for a job than found one. Too many people are falling
further and further behind because, right now, the president’s policies are making people’s lives
harder.”

The facts: She leaves out a significant factor in the high number of people who
aren’t looking for jobs: Baby boomers are retiring.

It’s true that a large part of the decline in the still-high unemployment rate is due to jobless
workers who have given up looking for a job. Also, there are roughly three people seeking every job
opening.

As of December, the economy had gained 3,246,000 jobs since Obama took office in January 2009.
When he was inaugurated, the unemployment rate was 7.8 percent and on the rise. It peaked at 10
percent in October 2009 and has been inching down ever since, to 6.7 percent in December.